Companies could be hiring that bad boss on purpose. According to new research in the Journal of Business Ethics, the “dark” personality traits – questionable ethical standards, narcissistic tendencies – that make a boss bad also make that person much more likely to go along with manipulating earnings and may be the reason they got the job in the first place.
Co-authors Nick Seybert (University of Maryland’s Robert H. Smith School of Business), Ling Harris (University of Nebraska-Lincoln), Scott Jackson (University of South Carolina) and Joel Owens (Portland State University) studied the process of hiring executive management accounting candidates and its relation to the company’s earnings management practices – that is, a company’s tendency to inflate its income.
Through several studies, they found that when a company needed to report earnings aggressively, experienced executives and recruiters tended to recommend hiring candidates with dark personality traits over candidates who sought input from others and believed in strong ethical foundations. [Read more…] about Firms recruit dark personalities to manipulate earnings